KUALA LUMPUR (July 24): Denko Industries Bhd rose as much as 5.5 sen as investors anticipated the plastic component manufacturer and food wholesaler to post better earnings.

Denko (fundamental: 0.8; valuation: 0.9) rose to its highest so far today at 46.5 sen. At 12:30pm, the stock settled at 45.5 sen.

Some 18 million shares changed hands, making Denko the third most-actively traded counter across the bourse. At the current share price, it has a market capitalisation of RM47.5 million.

A dealer told theedgemarkets.com that Denko's share gains could be due to investors' confidence that the group might register better results.

"Further[more], they expect the company to realise some gains from land disposal, which was announced last month," he added.

Denko's financials have improved. In the fourth quarter ended March 31, 2015 (4QFY15), Denko made a net profit of RM2.83 million, as compared to a net loss of RM143,000 a year earlier. Revenue rose to RM22.76 million, from RM16.89 million.

For FY15, the group registered a net profit of RM3.09 million versus a net loss of RM3.1 million a year earlier. Revenue came in higher at RM80.08 million, against RM74.44 million.

Denko is selling a leasehold industrial land in Bukit Mertajam, Pulau Pinang for RM7.65 million to G2 Gold (M) Sdn Bhd.

Based on the tract's latest unaudited net book value of RM5.5 million, Denko is expected to realise a RM2.15 million gain from the disposal.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)